Canada's Bank of Montreal beats Q2 revenue, adjusted EPS estimates on commercial loan growth
Canada's Bank of Montreal beats Q2 revenue, adjusted EPS estimates on commercial loan growth
Overview
Canada banking group's Q2 revenue and adjusted EPS beat analyst expectations
Adjusted net income for Q2 rose 34% yr/yr, also beating analyst expectations
Company raised quarterly dividend and agreed to sell Transportation Finance and Vendor Finance businesses
Outlook
Company says improving client activity is driving commercial banking loan growth in Canada and U.S.
Bank of Montreal expects continued benefits from innovation and AI-powered client experiences
Company says disciplined investment and risk management expected to strengthen earnings quality
Result Drivers
FEE REVENUE GROWTH - Higher fee revenue in Capital Markets, Wealth Management, and Treasury and Payments contributed to earnings, per CEO Darryl White
COMMERCIAL LOAN GROWTH - Solid sequential commercial banking loan growth in Canada and the U.S. reflected improving client activity, according to CEO Darryl White
LOWER CREDIT LOSSES - Provision for credit losses fell to C$739 mln from C$1,054 mln in the prior year, mainly due to lower provisions in Capital Markets and U.S. Banking
Company press release: ID:nCNWZxT7fa
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q2 Revenue | Beat | C$9.57 bln | C$9.47 bln (9 Analysts) |
Q2 Adjusted EPS | Beat | C$3.67 | C$3.45 (13 Analysts) |
Q2 EPS |
| C$3.53 |
|
Q2 Adjusted Net Income | Beat | C$2.73 bln | C$2.44 bln (9 Analysts) |
Q2 Net Income |
| C$2.63 bln |
|
Q2 Adjusted ROE |
| 13.50% |
|
Q2 CET1 Capital Ratio |
| 13.00% |
|
Q2 Provision of credit loss |
| C$739 mln |
|
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 9 "hold" and 2 "sell" or "strong sell"
Wall Street's median 12-month price target for Bank of Montreal is C$213.00, about 4.8% below its May 26 closing price of C$223.64
The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 13 three months ago
For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.
(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)